Interactive software developer iVast is in talks with the major studios, hoping to sell them on licensing its MPEG-4-based software.
The product centers on the emerging standard for streaming video. Unlike competitors Microsoft and RealNetworks, both of which provide a proprietary platform for streaming content, MPEG-4 is an open standard, which means content developers can create video for an MPEG-4-enabled system with relative ease.
“MPEG is already one unified platform,” said Jeff Benrey, iVast vice president of marketing.
Although MPEG-4 was conceived during the past couple of years by the Motion Picture Expert Group division of the International Standards Organization as a streaming video standard primarily for the Internet, industry representatives are now presenting to the Bay area chapter of the Society of Motion Picture Television Engineers proposed standards for set-top hardware that are compatible with several different versions of MPEG-4: video streamed to low-speed Internet users, content for a high-speed Web audience and broadcasts for interactive TV subscribers.
“[MPEG-4] can go to a PC,” Mr. Benrey said. “It can go to a set-top. It can go to a wireless device. The fact that it’s not a proprietary standard helps its adoption into set-top boxes and other appliances.”
The Post Group, a Hollywood post-production house, is helping iVast refine demos of its MPEG-4 streaming software. “Everyone’s talking about [MPEG-4],” said Post Group Chief Operating Officer Ron Silveira. “I don’t know of anyone actually using MPEG-4 yet.”
iVast, a venture-backed startup that has raised about $12 million to date, is hoping its software will generate licensing fees from the major studios once the majors see the value in the cutting-edge content tool.
But aside from the challenge any broadband entertainment company faces in edifying potential customers about its state-of-the-art concoctions, iVast will have to grapple with the unique challenge of selling an entire industry on the adoption of next-generation set-top machinery. Before a new breed of MPEG-4-enabled set-top boxes can be manufactured, MPEG-4-compatible chips to power the set-tops must be designed.
“Our estimate is second quarter of next year for when there will be set-top boxes that will be MPEG-4-enabled,” Mr. Benrey said. “Right now, the concentration is on the chip makers.”
Rich Mizer, the CEO of digital encoding company Digital Ventures Diversified who also serves as the Bay area chair for SMPTE, said major Hollywood studios are still studying the most enhanced version of MPEG-4 that would allow them to produce interactive overlays for television broadcasts.
Such overlays could be modified in various local markets to target specific demographics, which Mr. Mizer cited as one of the major assets of the MPEG-4 standard for interactive television.
“Hollywood is still a linear storytelling group,” he said. “I’m doing all these tutorials to get them up to speed. The ink is just barely dry.”
But Mr. Mizer may face an uphill struggle. Even interactive content devotees acknowledge that the expense of producing MPEG-4-enabled hardware may not yield a sufficient return of investment if interactive TV isn’t embraced by all demographic segments.
“It is, to an extent, a generational thing,” said Marty Levine, iVast’s vice president of platforms. “There is that class of consumers that just wants to sit back and flip channels. Certainly those groups of consumers that have grown up with the PC and the Internet are far more likely to embrace interactive TV.”
iVast, however, isn’t sheepish about betting its life on the acceptance of its interactive software. The company is lobbying venture capitalists for a new round of financing.